Iran offers to pay for large part of proposed gas pipeline to India

Nov 24, 2003 01:00 AM

The Iranian government offered to pay for the bulk of a proposed $ 3 bn natural gas pipeline from Iran to India through Pakistan, in a bid to get New Delhi to sign onto the project.
"The Iranian government is willing to bear 60 % of the total cost of the pipeline," Iran's Deputy Foreign Minister Mohammad H. Adeli said in New Delhi. Iran could guarantee India "a long-term, credible gas supply at the lowest cost and provide an assurance regarding the safe delivery of the gas," Adeli added.

The 2,600 km (1,600-mile) pipeline would save India around $ 300 mm a year in energy costs, he said. The project was proposed in 1996, but was shelved because of persistent tensions between India and Pakistan, who are in a decades-old dispute over the Himalayan region of Kashmir.
India's security fears remain the stumbling block to the project. New Delhi fears that a gas pipeline through Pakistan could be sabotaged, or be used as a political weapon by Islamabad. But renewed talk of the pipeline coincideswith recent peace moves by India and Pakistan. Last month, Pakistan said it would guarantee India a secure gas supply if it joined the project.

Experts say the project would benefit all three countries. Iran wants a market for its large natural gas reserves.
The pipeline would help India overcome its energy deficit, while Pakistan also would have access to the gas, and earn about $ 600 mm annually in transit fees.

Source: AP WorldStream via Comtex
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